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RBS had to be nationalised in two stages in 2008 and 2009

A former senior executive at the bank RBS has been forced to agree he will not take any senior or full-time work in the financial services industry.

The agreement between Johnny Cameron and the Financial Services Authority (FSA) comes after an investigation into the management of the bank.

He was chairman of its investment banking business at the time RBS had to be rescued by the UK taxpayer in 2008.

The regulator said he did not meet the required standards for a senior banker.

Mr Cameron said: "Given the losses sustained by RBS in 2008, as a director of the Royal Bank of Scotland Group, I recognise that it is appropriate that I take my share of responsibility, and I will not be seeking another managerial role in the financial services industry."

Legal settlement

Mr Cameron left RBS in January 2009 after seven years in the job and his conduct has been under investigation by the FSA since April that year.

The FSA questions his competence to run a bank, but doesn't think he broke any of its rules. Robert Peston, BBC business editor

The regulator said it had been looking at the "systems and controls" at the investment banking arm of RBS.

It refused to say exactly what it thought Mr Cameron had done wrong. However, the FSA made it clear that its punishment could have been more severe.

"Were it not for this undertaking, it was the FSA's intention to take steps to seek to prohibit Cameron from performing any significant influence function or any function held in full time employment in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm," the FSA said.

"On the basis of the information available to it, the FSA believes that Cameron would not meet its current standards for approval for a significant influence function," it added.

However Mr Cameron can still undertake part-time consultancy so long as it does not require FSA approval.

The FSA said it had not found any examples of the former RBS man breaching any regulations or making any admissions.

"The FSA questions his competence to run a bank, but doesn't think he broke any of its rules," said the BBC's business editor Robert Peston.

"What that implies is that it's quite possible to be on the bridge of one the world's great banks, which is part of the UK's economic infrastructure, while it ploughs into a humungous iceberg, while following the FSA's rulebook and the law," he added.

Northern Rock

Mr Cameron is the most senior figure in UK banking be punished for his role in the management of a bank that had to be bailed out by the government at the height of the UK banking crisis.

To stop it going bust, RBS had to be nationalised in two stages, with the taxpayer taking stakes in the bank first in October 2008 and then in January 2009 at a cost of £46bn.

The then chancellor Alistair Darling said if the government had not taken this action then the bank would have been forced to close down.

Last month, two former directors of Northern Rock, whose collapse in 2007 precipitated the banking crisis, were fined by the FSA and banned from working in the financial services industry again.

The former deputy chief executive David Baker was fined £504,000 for misreporting mortgage arrears data.

The former credit director Richard Barclay was fined £140,000 for also failing to ensure the accuracy of the bank's financial information.